"Increased deal activity is being driven by in part by the low unemployment rate which makes it hard for businesses to grow organically," said Craig Everett, PhD, Assistant Professor of Finance and Director of the Pepperdine Private Capital Markets Project. "There is an increasing trend of companies buying other companies in order to acquire their skilled labor force. This high demand for labor coupled with strong balance sheets, a positive lending environment, and historically low interest rates are all driving up deal flow and valuations. However, advisors aren't optimistic that the current climate will last through 2020. Considering that it's taking about a year to sell a business valued between $2 million - $50 million sellers should consider going to market before the market flips."

The report also found that seller-market sentiment is on the rise in most market sectors, with more advisors describing Q4 2018 as a "seller's market" than a year ago, in all but the $500,000 to $1 million sector. Of note, 2018 marks the first full year in which four of the five market segments have been described as a seller's market.